GTA new home sales exceed pre-pandemic levels

  7/28/2021 |   SHARE
Posted in GTA Real Estate by Anabela Serra | Back to Main Blog Page

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New home sales in the Greater Toronto Area in the first six months of 2021 are up 25 per cent over the 10-year average, totalling almost two thirds of all GTA new home sales in 2020.

According to the Building Industry and Land Development Association (BILD), the first half of 2021 saw 24,060 new home units sold. Data from Altus Group, BILD’s home market data source, shows that 3,860 units were sold in June, up four per cent from the 10-year average.

June 2021 saw new home sales in the GTA bounce back to 3,860, above the 3,632 in June 2019, after a dip in June 2020 below 2,000.

BILD president and CEO Dave Wilkes said the demand for housing in the GTA “isn’t going away anytime soon.”

“We really are seeing that this sector can be and should be a driver of the economy, and a driver of the recovery that we’re entering into post-pandemic,” he said.

The housing market in Canada and Toronto has started showing signs of cooling slightly in recent months, with sales dipping month-over-month, though it doesn’t appear to be having much of an effect on prices.

But Wilkes says the lower sales volume has more to do with regular seasonal variances than a longer-term market downturn, as sales are generally slower in the summer.

“I really do believe that the new home market will be one that has strength, not only over the short term but the medium-long term,” he said. “I have no reason to believe that we’re going to see a significant tapering of overall demand.”

The second half of 2021 will be influenced by interest rates, the economic recovery and buyer sentiments, said Wilkes.

“If the trend continues, (2021) will be one of the best years on record.”

Condominium apartments, including stacked townhouses, made up 2,775 of the new home sales in June, 13 per cent above the 10-year average. However, new single-family homes, excluding stacked townhouses, accounted for the other 1,085 units in June, 14 per cent below the 10-year average.

That’s because after more than a year of houses reigning supreme, condominiums are making a comeback after the so-called exodus from downtown centres caused by the pandemic, said Wilkes.

Inventory levels and demand have driven the prices of single-family homes up, he said, and homebuyers are once again turning to the condo, especially as pandemic restrictions ease across the province this summer and into the fall, seeing students and office workers return to the streets of downtown Toronto.

“People are returning to downtown cores,” said Wilkes.

In June, regional new home sales in Toronto were significantly lower than pre-pandemic levels, unlike other regions. While Toronto’s June new home sales totalled just over half what they were in June 2019, Durham and Halton regions saw June new home sales more than double compared to June 2019. (Toronto’s new home sales in June 2020 were significantly lower than both 2019 and 2021, while Durham and Halton both saw sales go up in June 2020 from 2019.)

Meanwhile, June 2021 new home sales in Peel and York regions were both much closer to June 2019 numbers after a significant dip in June 2020.

But it’s worth noting that in April and May of 2021, new home sales in Toronto were higher than the same months in 2019.

Wilkes believes Toronto will rebound fully soon, especially as condos continue to climb back up the ladder — after all, new home sales in Toronto are almost exclusively condos.

“I’m very, very bullish from a longer-term perspective,” he said, noting that the GTA’s overall new home sales in June 2021 still put the market ahead of 2019, which was one of the strongest on record.

“If we continue the pace that we’re on now, we could have one of the strongest years in new home sales that we’ve seen in a long time,” he said.

“We really have a sector that is poised for continued strength and growth.”

Benchmark prices in June are also up over the last 12 months: $1,058,366 for new condo apartments, up 5.9 per cent; and $1,405,597 for new single-family homes, up 23.1 per cent.

The total remaining new home inventory in June came to 11,451 units.

“The demand for new homes remains impressive, in particular given the challenges homebuyers have faced in the past year,” said Altus Group’s analytics team leader, Edward Jegg, in a press release Tuesday.

“New product brought to the market has not kept pace with sales, and, as a result, relatively low inventories of product available to purchase continue to exert pressure on prices.”

Source: Niagara Falls Review



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